Effect this measure will have on costs and revenues of state government.

The stated purpose of this bill is to exempt from the sales and use tax special equipment installed in a motor vehicle for the use of a person with physical disabilities and to exclude the value of the equipment when determining the value of the vehicle for imposition of the tax on the privilege of effecting the certification of the title of the vehicle.

Due to the broad nature of this bill, we are unable to accurately estimate the loss in sales tax revenue (i.e., 6 percent Consumers Sales and Service Tax) to the General Revenue Fund. The bill does not indicate what is classified as special equipment. Nor, does the bill define physical disability. Also, this bill would exempt repair and replacement parts for such equipment. The Department of Motor Vehicles will address the affect of this proposed bill on the 5 percent sales tax on the purchase of motor vehicles, which is deposited into the State Road Fund

Additional administrative costs to the State Tax Department would be minimal during the current fiscal year due to notifying taxpayers of the new exemption. Thereafter, there would be no additional administrative costs to the Department.

Fiscal Note Detail

Over-all effect

Effect of Proposal

Fiscal Year

2012Increase/Decrease(use"-")

2013Increase/Decrease(use"-")

Fiscal Year(Upon FullImplementation)

1. Estmated Total Cost

0

0

0

Personal Services

0

0

0

Current Expenses

0

0

0

Repairs and Alterations

0

0

0

Assets

0

0

0

Other

0

0

0

2. Estimated Total Revenues

0

0

0

3. Explanation of above estimates (including long-range effect):

Due to the broad nature of this bill, we are unable to accurately estimate the loss in sales tax revenue (i.e., 6 percent Consumers Sales and Service Tax) to the General Revenue Fund. The bill does not indicate what is classified as special equipment. Nor, does the bill define physical disability. Also, this bill would exempt repair and replacement parts for such equipment. The Department of Motor Vehicles will address the affect of this proposed bill on the 5 percent sales tax on the purchase of motor vehicles, which is deposited into the State Road Fund

Additional administrative costs to the State Tax Department would be minimal during the current fiscal year due to notifying taxpayers of the new exemption. Thereafter, there would be no additional administrative costs to the Department.

Memorandum

The stated purpose of this bill is to exempt from the sales and use tax special equipment installed in a motor vehicle for the use of a person with physical disabilities and to exclude the value of the equipment when determining the value of the vehicle for imposition of the tax on the privilege of effecting the certification of the title of the vehicle.

The bill does not indicate what is classified as special equipment. For example, is the special equipment used to operate a motor vehicle by the person with disabilities or could it also be used by passengers? Also, the bill does not indicate what is classified as a physical disability.